On the second floor of the House of Horvath cigar factory, where light pours in from old lead glass windows, the big green machines clatter from half past seven until three. The women wear blue smocks. Lurdes Gomes, her thumbs black with tar, feeds big, floppy, greenish-brown tobacco leaves - imported by ship from Cuba - into one of the plant's "pre-Castro" machines, the stripper, which slices the spine off each leaf's centre.

At the next machine, Fernanda Lima stretches each leaf on a steel pattern, which cuts two oblong shapes from each half-leaf. Shredded tobacco pours from a hopper. The machine wraps the shredded tobacco in the leaf. Off pops the finished product: a Bances cigar, made in Toronto.

The Horvaths are a stubborn family. Joe Horvath, Sr. began making King Edward cigars in Toronto in 1932. Today an oil painting of the patriarch hangs in the corner office. Joe's son is boss now: a gold nameplate on his desk announces "Joseph E. Horvath, President." His daughter, Cathy, is vice-president of finance; her husband, Colm Kennedy O'Shea, is general manager.

Amid the rapid transformation of Ossington Avenue into a happening gallery and restaurant strip, it's improbable and somehow comforting to stumble on a cigar factory, just up from the Centre for Addiction and Mental Health. And yet here it is, employing about 40 people at the factory, along with 10 sales staff across Canada.

"If we were smart we would leave" and move to the suburbs, admits Mr. O'Shea. But they stay, grateful for their loyal local workforce. Teresa Fierro, the cigar inspector, has worked for the Horvaths 46 years.

"Even if I won the lottery I'd probably end up staying here, just for the sake of Joe," says Dominic Bono, the factory's engineer. His mother, Antonia, retired from here.

It's a good thing Mr. Bono likes his job, because the factory would quickly fail without him. For 21 years, Mr. Bono has coddled and tweaked and repaired the 70-year-old cigar-making machines. In his workshop, with his milling machine, lathe and surface grinder, he can build many of the parts that no one makes anymore.

"They are pretty old, but whenever something goes, we repair it," he says.

At noon the machines go silent and the women wash up for lunch; on a table by the stripper, Ms. Gomes opened a box of takeout: shrimp and pork on rice from the Vietnamese restaurant on the corner. Ms. Lima ate salad.

Nearby in what they call the "marrying room," thousands of cigars sat curing. Once they're ready, another crew packages them up: Bances, V Series, Bandi, No. 263 and Gold Bands.

Note to any Health Canada officials reading this: Yes, tobacco is bad for you. Mr. Horvath, 68, who every day puffs through 10 Panter Mignon menudos, which he imports from Holland and distributes in Canada, should probably watch it. "We're not hooked," he insists.

Still, as Mr. Horvath points out, most men (99% of his customers are men) smoke cigars infrequently, perhaps for a celebration, and do not inhale.

"The average guy smokes two or three cigars a week," he says. "After dinner, a nice cigar and a brandy to go with it. We're not in the volume business."

Even so, he's not complaining: his business has grown steadily for 30 years. Governments, meanwhile, collect about $1.75 in taxes for every quarter Horvath puts in its pocket, Mr. O'Shea estimates.

Mr. Horvath was born on Beaconsfield Avenue near here. When he was four, his father moved him north of Eglinton to Briar Hill, to get away from the rough downtown. But these days downtown is the place to live, and Mr. Horvath has one eye on the future. After buying 77 Ossington and 71 Ossington, a few months ago he also bought 63 Ossington next door. "One guy joked that H of H has a new meaning now," he says: "Honcho of Hossington." He expects that redevelopment of the land will come someday. "As owner I would take a pretty good share of development," he says.

Joe Horvath samples a smoke outside his Ossington Avenue cigar factory, in which dozens of workers use traditional machines and methods to produce a range of cigars from imported leaf. Photos by Peter Redman, National Post